Up with Minimum Wage – Hell, Yes! How about Hospitality Workers, Too?

New Orleans President Obama in the State of the Union address called for an increase in the federal minimum wage, which has been stuck for the last four years at $7.25 per hour. The President has done some bargaining, hopefully not with himself again, but the target for his proposed increase is $9.00 per hour, rather than the $9.50 he had proposed in his first term.

I’m not for quibbling though if he is really serious and finally willing to do the work to not just get an increase in the minimum, but also finally win indexing to the cost of living, which would mean low wage workers would not keep watching their paychecks shrink in the long, multi-year stretches of waiting for Congress to finally remember they need a raise. The last serious argument for indexing was during Robert Reich’s tour at the Labor Department, but that notion was pulled back for the health care push in the first Clinton term.

Invariably, the increase would be over a number of years, rather than in one big gulp. Maybe a bump to $8.00, then $8.50, and finally $9.00 over a couple of years, putting workers at $9 by the end of 2015 or starting 2016, more likely. With indexing kicking in even at 2% or so with current inflation, the value of the $9.00 would stay evergreen.

The one thing I did not hear was a call to finally push back the lobbyists for the hotel and restaurant associations, and move the needle forward on tipped employees, who have been stuck around $2 bucks per hour over the last few bumps in the Fair Labor Standards Act (FLSA) governing the minimum wage. Yes, they are supposed to get to the $7.25 figure through tips, but the enforcement is weak, and that’s putting it mildly, and the confusion for customers is huge, since most have no idea what kind of pittance they are earning. The fast legion of tipped employees are not cocktail waitresses or brunch waiters in upscale breakfast places in New York City making $300 in tips per shift, but are humping it to make enough to bust past $8 per hour.

I will avoid ranting about my ever unpopular argument that tips are one of the major factors holding back hospitality workers from fair wages, solid unions, and dignity and respect on the job. Nor will I list, as I have often done, the number of countries that scoff at tips as disrespectful or even refuse tips and turn them back to the customer when afforded.

Whether tips are an abomination for workers or not, the minimum wage for all the growing millions of hospitality and service workers classified as tipped employees desperately needs to be included significantly in any serious proposal for raising the minimum wage.

How about targeting the benchmark at 50% of the wage set per hour for non-tipped employees? That would mean $4.50 for tipped workers when the FLSA number is $9.00 and so forth.